5.2.1—Government budget

A government budget sets out expected public revenue and expenditure for a period. Current spending covers items such as wages and transfers; capital spending creates or improves assets; revenue mainly comes from taxes and other receipts.

The budget position is a flow over the period, not the stock of debt already accumulated. A budget balance compares revenue with expenditure before financing decisions are considered.

If revenue is 500 and total spending is 540, the government must finance a 40 budget shortfall, usually by borrowing or using reserves.

A budget is not the same as the national debt, and a budgeted figure is not necessarily the final outturn.